Your hindsight is impeccable 1K. I’ll give you that. I’ll try here to answer your somewhat condescending questions:
- I’m by nature a conservative investor. Within a diversified portfolio, I‘ve always maintained some significant exposure to equities. So nothing’s changed just because my analysis tonight concluded we’re running on “borrowed time“. Considering 22 years retired, I’m likely a lot more more aggressively invested than many in that situation - and less so than others.
- Generally, I feel it’s foolish to try and invest according to a reading the macro tea leaves. I’ve said as much here on more than one occasion. I rarely do it - perhaps on occasion for small speculative gambits.
- Yes, there have always been doomsayers: Granville, Dent, Rogers, Faber, Hussman to cite a few. I’ve listened to all of them . Never fell in love with any. Although I’ll say Rogers is certainly a glib and engaging talker.
- Short the market? Not me! Takes nerves of steel. And greater insights into specific companies than I possess. Do any of my funds short? Probably. In particular alternative fund TMSRX (about 10% of my holdings) has the ability to short.
- You didn’t ask, but my post was not intended or offered as actionable investment advise. Indeed, it suggested there might be many more years of rising asset prices.
I hope I’ve answered your questions.
So what are you overlooking here in your rather derisive and dismissive antipathy towards my thoughts? Probably the 35+ year downtrend in global interest rates. Do you really think the past 35+ years of generally rising asset prices would have played out that way had the 10-year risen from below 1% to over 10% during those years instead of the other way around? And do you choose to ignore the massive and unprecedented Federal Reserve interventions, both during the ‘07-‘09 market wreck and again after the March pummeling? Why would you find their propping up wine growers and auto sales companies that far-fetched? BOJ has purchased stocks in the past. And our own Federal Reserve is currently buying / owns corporate bonds rated just one notch above junk.
BTW- You’ll be glad to learn the Pres. is now talking up further tax cuts - apparently to be enacted by by decree.
MORE TAX CUTS COMING?

Thanks. There’s some serious implications underlying this (somewhat silly) valuation picture. Those relate, IMHO, to all asset classes (stocks, commodities, gold, real estate, etc.).
The only way I can see the current out-of-whack valuation picture continuing is if the Fed continues cutting rates all the way to 0; than goes negative; than than starts buying junk (bonds that is); and than eventually starts buying equities + whatever else they haven’t yet bought (... maybe used cars and California red wine). It would also help if the politicians continue to curtail taxing while increasing spending. This would all play out over many years of course.
But what happens when the music stops?

For years after 2008-9 investors, journalists and "experts" said the above. Valuation is still high, inflation will be up, rates can only go up.
and we had the longest bull market.
Investors who stayed out keep complaining.
Are you in?
Are you shorting since valuation are silly?

Thanks. There’s some serious implications underlying this (somewhat silly) valuation picture. Those relate, IMHO, to all asset classes (stocks, commodities, gold, real estate, etc.).
The only way I can see the current out-of-whack valuation picture continuing is if the Fed continues cutting rates all the way to 0; than goes negative; than than starts buying junk (bonds that is); and than eventually starts buying equities + whatever else they haven’t yet bought (... maybe used cars and California red wine). It would also help if the politicians continue to curtail taxing while increasing spending. This would all play out over many years of course.
But what happens when the music stops?

Thank you @msf for the chart.
Just eye-balling it, the % rate on a 2-year top-grade muni appears to be 0.1% - That can’t be right? But if it were, than a $1,000 muni held to maturity (for 2 years) would yield $2 (plus a few pennies compounding). That’s less than what a Big Mac costs. (And, after 2 years the Big Mac would have gone up in price.) Sounds like a vicious downward spiral.

"Morgan Stanley forecasts a 2.8% average annual return over the next 10 years for a 60/40 portfolio. The average has been nearly 8.0% since 1881 and about 6% over the last 20 years ."
Derf

Perhaps an insightful article from Barrons would be more informative. Joyce Chang is the Chair of Global Research at JP Morgan. Her comments on the impact of COVID pandemic are well articulated. Also some suggestion on investment opportunities at the end of the article.

Question: You’re not predicting outstanding returns from equities either.
Answer: No, but you will have some returns. The traditional 60/40 equity/bond split, which earned 10% a year over the past 40 to 50 years, is now down to 3½%. Even if you’re tilted to equities, you’re still not going to get 10% again. You’re going to get something below 5%, but investors really have to contemplate what their overall asset-allocation parameters will be. In a world of zero yields, Is 80/20 the way to go? Asset classes that are a hybrid between “safe” bonds and equities—such as high-yield bonds and loans, collateralized loan obligations, commercial mortgage-backed securities, convertibles, and equity and mortgage REITs—offer equity-like returns. There’s a case for emerging market debt, because I think yields will have to come down further in emerging markets as well. China is going into [J.P. Morgan’s global bond] index this year, and our longer-term view is that China is going toward zero yield.

How the pandemic will change financial markets forever

I read the article and laughed. The first 4 pay under 1.9% which I wouldn't call great cash flow.
VYM pays about 3.6%..BUT WAIT...The higher yield stock style investing must be debunked all the time. VYM trails the SP500 for YTD, 1, 3, 5, 10 years. VYM recovery was way behind. YTD: SP500=VFIAX made 14.7% more than VYM.
I guess you missed the FAANGM and instead concentrated in higher income stocks (T???). Why not look at all stocks and select the best regardless of higher income.
So, what is more important, higher income or higher total return? of course higher returns is better and what I have been practicing since the start, even at retirement.
If I need more cash than my monthly dist (usually bond funds) I just sell some shares when I need to.

Would be nice to expand on this topic; but I continue to fall back to the aspect that Trump remains to be mentally impaired; as was apparent in his demeaning behavior just before and during his involvement in the Republican debate.
He remains the most dangerous person in the world; and changes the scale of what I thought was wrong during the Vietnam era......1965-1975, and the ramifications for years to follow.
Fini

Assuming your investment platform (Fidelity, etc.) allows you numerous choices for purchase; and with some of the funds already mentioned above, part of the choice would be U.S. centered or global, too. I remain U.S. focused at this time.
The below chart (started before added comments) contains mostly U.S. equity centered, balanced funds (moderate allocation, 50 - 70% equity).
As to BRUFX mentioned above, this is only available via direct investment (postal) with Bruce and not through electronic choices on other platforms. My concern with Bruce at this time is the age of the managers (2), being 88 and 60; if my information is correct. As to DODBX, their recent lower performance is likely due to more exposure to non-U.S. holdings.
Viewing the chart backwards for a number of years finds FPACX in the middle of the pack. Recent performance is apparently due to being a bit edgy with the market melt in February, which is understandable. The other funds in this list apparently maintained or added to the equity positions during and after the melt.
Our accounts are with Fidelity and we have access to many moderate allocation funds, but I remain biased to FBALX , which has an annualized return of 9.4% since inception in 1986 and remains in the upper 90% of the nearly 700 similar funds . During this period, this fund has been through a lot of market swings, and most individual investors would be very pleased to have this long term performance.
You could build your own with a 2 fund or etf combo of equity and bonds (ex. QQQ and AGG) OR a decent active managed equity and bond fund combo. While I remain biased to high quality bonds, their future may not persist as over the past 40 years. 'Course the death of bonds has been in place for quite awhile. But, if quality bonds lose their value in the coming years with a "build your own", the same lose of value would likely be reflected in an active managed, moderate allocation balanced fund, too. We have a 529 educational account we manage, which was started with and still maintains the same mix of 50/50, being VITPX and VBMPX. The 10 year annualized combined return is 8.8%. We'll take this performance without complaint.
1 year chart of FPACX , JABAX , CTFAX , ABALX , FBALX , FPURX
Strictly my opinions and viewpoints. There are many investment paths to follow.
Regards,
Catch

Hi guys,
I always enjoy reading Dr. Madell's newsletter. Recently, he started offering a free portfolio review for his readers. In this edition, he comments on some of the portfolio's he has reviewed. For me, this was an interesting read.
As for my cash, bond and stock allocation ... My baseline asset allocation (being retired) is 20/40/40 with the ability to overweight (or underweight) my stock and bond areas by up to 5% each, if felt warranted. I generally let my cash allocation float. Curently, I'm 15/45/40 putting me 5% overweight in the bond (income) area of my portfolio due to low cash yields. I am presently neutral with my stock allocation eventhough I feel stocks are overbought. Within my stock allocation I'm about 50% value / 50% growth along with being about 65% domestic and 35% foreign. My investment foucs over the past five years, since I retired, has been to grow the income stream that my portfolio generates while at the same time continue to grow my principal to offset inflation. Thus far, I have grown (on average) income generation by about 15% a year and principal by about 8.5% a year.
Old_Skeet

Some years ago, I experimented with flexible (I call them "go anywhere") funds. The Pimco All Asset funds come to mind.
I found that the "go anywhere" funds that I chose seemed to go to the wrong places. I use mostly target date funds now.

https://www.google.com/amp/s/www.marketwatch.com/amp/story/stock-market-experts-sees-a-monstrous-rally-rally-taking-hold-next-week-if-one-recent-trend-holds-11596827276
/Stock-market expert sees a ‘monstrous’ rally taking hold next week, if one recent trend holds
Last Updated: Aug. 7, 2020 at 6:55 p.m. ET
Could epicenter stocks surge by 30% next week? Fundstrat's Tom Lee thinks so. Getty Images
The best start to an August for the U.S. stock market in years might get even better, as soon as next week, if the forecast from Thomas Lee, founder of Fundstrat Global Advisors, is accurate./
Not sure if monstrous rally is coming, but DJI gained >36%% since the March crash.
We have been buying qqq and vht/couple bio tech and Healthcare etf recently. Glad did not pull out to all cash few months back. Couple friends at work did this and missed the slow upward late spring summer rally
If covid19 data improves/ stabilized next few weeks/month with minimal deaths economy may recover sooner than later

There an easy way to not pay early redemption. I have done it several times over the years but usually I don't buy a fund that has penalty fee over 30 days. If you don't know how to avoid the penalty then you will continue not to know it :-)
I sold IOFIX at the end of 02/2020 and I'm not going to buy until I feel better about it. Most of my money is in HY Munis.
I did hold a small position in EIXIX instead for several weeks. This fund hold higher rated securitized bonds than IOFIX based on the fact it didn't fall so much in March.

FPPTX is less than double the size of total AUM ($200 million) larger than QRSVX ($132 million). Keeping the "I" shares will be interesting. Can I exchange money into other FPA "I" funds?

What other "I" funds are there? The Queens Road announcement mentions FPA Queens Road Value Fund and its new "I" shares. So far, that's the only other FPA fund I can find with "I" shares.
It will be interesting to see what rules are added for these shares. A few fund families (e.g. Grandeur Peak) sell both institutional and retail class shares with the same minimums. If that's what FPA winds up doing, exchanging institutional shares from one fund to another would not seem to be an issue.
Then there are funds like the former Salomon Bros. funds. I have a few shares of one of these funds, gifted to me years ago. After changing hands many times (through Smith Barney, Citicorp, Legg Mason) they're now branded Franklin. Along the way, share classes were added and the legacy shares "upgraded" to O class and then merged into I class. I was originally told that I could transfer shares into the same share class of any fund, regardless of min. Later, that was changed so that I was required to meet the 7 figure min.
The last time I checked with Legg Mason, they wouldn't even allow me to transfer the account to a brokerage (unless I had millions of dollars in the account).
Fund company rules for legacy shares range from the sublime to the ridiculous. I hope FPA is reasonable.

I have held FPPTX for numerous years. After Rodriguez moved up in the company, the fund was never the same afterwards. I also owned QRSVX some years ago, but it didn't really move for the several years I owned it so I sold it.
The combination is supposed to be complete in the fourth quarter 2020. There will not be any sizeable capital gains distributions as the FPPTX is in a CG loss position according to M*. Have not seen any new SEC filings yet.
FPPTX is less than double the size of total AUM ($200 million) larger than QRSVX ($132 million). Keeping the "I" shares will be interesting. Can I exchange money into other FPA "I" funds?
I will post any filings as they come up.

Twentieth Century Giftrust- that's a name I hadn't heard of in a while.
The Surprising Success of a Dumb Investment

What are the lessons I take from all this? First and most important, the experience illustrates how much wealth you can build even if you don’t invest in just the right stock funds. Buying, holding and watching your money grow is really hard to do—witness the Giftrust lawsuits—but it usually pays off.
But I also learned that every investment strategy goes in and out of style. And so it was with Giftrust’s momentum strategy. What’s more, Giftrust was 20% more volatile than the S&P over the past 15 years. I’ve never known a fund that didn’t ultimately pay the price for such high volatility. In investing, slow and steady really does win the race.

AFAIK, the longest redemption fee period ever was imposed on (no surprise) Vanguard Horizon funds. These were four funds created as long term investments on August 14, 1995. The fee was 1% on shares redeemed in less than five years.
Here's the last prospectus (Feb 27, 2001) where the fee was imposed on all the funds.
On April 6, 2001, Vanguard made changes to three of the four funds:
Vanguard Global Asset Allocation (VHAAX) was designated to be terminated on July 27, 2001.
Vanguard Global Equity fund (VHGEX) ended its redemption fee.
Vanguard Strategic Equity Fund (VSEQX) ended its redemption fee.
It would be a while longer before Vanguard dropped the redemption fee on its Capital Opportunity Fund (VHCOX). And now you know where the 'H' in the ticker came from.
(Note: I exclude funds like Twentieth Century Gifttrust, which could not be redeemed, period, for at least ten years.)

Years back some funds that I owned had a 2% redemtion fee if the position was held less than 30 days. If I remember correctly this fee was paid to the managers and did not benefit fund shareholders. Wonder who gets benefit of this fee when imposed?

Can anyone explain what exactly this fund is? I don't fully understand it.
I invested 25% of in it a couple of years ago because I was told it was one of the safest funds in my companies 401k offerings. The only other relatively semi safe funds offered are FXNAX and MWTSX. I have 25% in the former and the remaining 50% in CDs in IRA's.
I am still working at 68and will continue (knock on wood). I want to preserve what I have if possible.
Is this fund as safe as CD's?

Hi Derf - Yeah - I was one of the last ones to receive it, but I got the $1200 bonus check along with the signature. Thankfully, the USPS was still functional than.
Today the President unveiled a new plan that surely should ignite inflation, especially if we keep spending like a drunken sailor. The Plan - Deceptively simple. “Spend more. Tax less.” Why didn’t somebody think of it before? Also has a nice ring to it. I’m thinking it might catch on with the public the way Miller Beer’s early slogan for Miller Lite caught on years ago. “Tastes Great!...Less Filling!"